Cheap imports threaten collapse of €1.5bn PCP car loans market

The use of PCPs to buy vehicles has increased from 14,000 loans to 126,000 in the past five yearsCARL COURT/GETTY IMAGES

High levels of car imports from the UK have the potential to cause the €1.5 billion personal contract plan market to drop into negative equity, the financial watchdog has warned.

The use of PCPs in Ireland has increased from 14,000 loans to 126,000 in the past five years, according to an overview of the market by the Central Bank. Car dealers have offered the plans since 2013, but concerns have been raised that they fall outside the regulator’s consumer protection code.

Under PCPs buyers pay a deposit and make monthly repayments for an agreed time — typically three years — at the end of which they can return the car or buy it at a “guaranteed minimum future value” that is agreed with a dealer at the…

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